Facebook stock rebounds from intraday doldrums as new e-commerce offering announced

The Facebook logo is pictured at the Facebook headquarters in Menlo Park, California, in this January 29, 2013 file photo. Facebook Inc advertising business grew at its fastest clip since before the company's May initial public offering, helping the company's revenue expand 40 percent to $1.585 billion. REUTERS/Robert Galbraith/Files (ROBERT GALBRAITH)

Facebook's newest offering is a gift card that will be part of Facebook Gifts, the e-commerce unit that excited investors and analysts when the revenue-generating plan was originally announced in September. Users who purchase or receive a Facebook card as a gift will receive an actual physical card in the mail emblazoned with the Facebook logo; the card can then receive additional amounts for different retailers, either from the user adding funds or gifts.

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The effort is starting small, with just four partners in brick-and-mortar retail signing on -- Target, Sephora, Olive Garden and Jamba Juice. The card can hold balances for multiple partners at the same time, and it seems likely that Facebook would seek to expand the program to other retailers, though it did not mention future plans in the blog post announcing the feature Thursday. It is pushing digital Starbucks cards as birthday gifts in a separate effort, Business Insider reported.

Before the blog post announcing its new gift card Thursday, Facebook stock was struggling in the wake of Wednesday's earnings report, falling as low as $28.74, a decline of 8 percent from Wednesday's closing price. However, the price steadily built back up during the day, even moving into the black late in the session before falling back; shares closed at $30.98 after a daily decline of 0.8 percent.

The small stock decline does not mean Facebook is out of the woods, however: Several analysts downgraded the stock after its earnings report, despite Facebook's ability to show more meaningful growth in mobile usage and monetization. At least five analysts who cover the stock cut their ratings Thursday on Facebook, according to Eric Savitz at Forbes, with the most common reason being Facebook's heavy spending, which will decrease the company's gross margin.

"We are downgrading ... as management warns of significantly higher expense levels in 2013 as a result of aggressive hiring and investment plans," Jefferies analysts Britz Pitz and Brian Fitzgerald wrote in their note, explaining that the heavy investment sets the company up well for a long-term investment, but hurts any near-term successes.

Other notes followed a similar theme of concern for earnings in 2013 due to Facebook's outsized spending habits, but belief that the long-term path for Facebook is solid. "We view FB as a core long-term 'Net stock," Citigroup analyst Neil Doshi wrote. "But with plans to invest heavily in the biz in 2013, and little expected contribution from new initiatives like Gifts or Graph Search, we don't see any near-term catalysts for the stock."

The upturn in Facebook's stock price during the session showed that investors were listening and understand that Facebook is a strong long-term investment, Macquarie Research analyst Ben Schachter told Reuters.

"The more people thought about it throughout the day, the momentum changed and longer-term investors won out, saying these are investments we think they should be making," he said.

The quarterly tablet sales report from IDC showed that vendors shipped 52.5 million tablets in the fourth quarter of 2012, a whopping 75.3 percent increase from the same period in 2011. While Apple was still easily the leader in the field and saw its shipments increase by 48.1 percent, its growth rate was puny compared with Samsung and Asus, which shipped 263 percent and 402.3 percent more tablets, respectively.

"New product launches from the category's top vendors, as well as new entrant Microsoft, led to a surge in consumer interest and very robust shipments totals during the holiday season," IDC's research director for tablets, Tom Mainelli, said in Thursday's news release. "The record-breaking quarter stands in stark contrast to the PC market, which saw shipments decline during the quarter for the first time in more than five years."

While Apple underperformed in January, the markets had their best opening month to a year since 1997, as the S&P 500 had its largest gain in a single month since October 2011. Thursday's trading wasn't representative of the rest of the month, however, as indexes fell slightly ahead of Friday's release of the monthly jobs report from the federal government.

Tech stocks held up well, as the tech-heavy Nasdaq and SV150 stock indexes outperformed the Dow Jones and S&P 500. Electronic Arts (ERTS) gained 4.3 percent after announcing earnings Wednesday that were not great, but still managed to exceed Wall Street's lowered expectations for profits. Zynga continued to have an extremely volatile week with a gain of 7.1 percent; the stock gained 14.1 percent Monday, then dropped 8.5 percent Tuesday and 2.7 percent Wednesday.

And the widely watched Standard & Poor's 500 index: Down 3.85, or 0.26 percent, to 1,498.11

Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.